A lot of people are wondering why Nokia didn't choose to go with Android. How can Nokia differentiate themselves when Android is a lot more open and free than Windows Phone 7? As usual, the key to this is in the details. If you read the announcements carefully, you'll see that Microsoft offered Nokia something Google most likely didn't. Update: What a surprise. Elop just confirmed Nokia has a special deal with Microsoft. Whereas HTC, Samsung, and so on are not allowed to customise WP7 - Nokia is, further confirming my theory.

I think this is an actual case of just that. Nokia has basically failed at maintaining its hold on the market as a complete vertical solution, and now is going to being just another hardware manufacturer. They should have paid attention to HP - now they have a shot at challenging iOS and the complete hardware/software integration with their own ecosystem. It doesn't guarantee success, but at least what they're doing looks appealing from an end-user perspective.

Nokia couldn't keep up - they seem as dysfunctional as Microsoft in that regard - and now are partnering with Ballmer, of all people. Sure, WP7 isn't Android, but it's just as much of a failure for a hardware maker to be using. You'll inevitably have the same low margins and, no matter what an agreement says, you won't be able to influence development for just your own company/vision effectively.